REPORT 

OF  THE 

COMMITTEE  ON  RAILWAY  TRANSPORTATION 

OF  THE 

NEW  YORK 

$oarb  of  Crabe  anb  Sr  asportation. 


Adopled  June  9th,  1830. 


To  the  Directors  of  the  Board  of  Trade  and  Transporta- 
tion: 

It  having  been  suggested  that  a  brief  review  of  the 
work  of  this  Board,  in  endeavoring  to  protect  public 
rights  in  our  modern  system  of  highways,  would  be  of 
interest,  your  Committee  respectfully  report  as  follows: 

More  than  ten  years  ago  it  became  apparent  to 
many  persons  that  the  abuses  which  accompanied  the 
enormous  advantages  of  steam  highways  must  be  reme- 
died. The  corruption  of  the  '  Credit  Mobilier;'  the 
g-iant  stock- watering  operations  of  the  elder  Vanderbilt, 
the  constant  and  rapid  progress  made  in  consolidating 
links  of  railroad  into  vast  systems,  with  a  tendency  to 
exercise  arbitrarily  and  unequally  tbe  power  thus  ac- 
quired, attracted  the  attention  of  thoughtful  minds  to 
the  relations  which  the  corporations  controlling  this  new 
and  enormous  power  should  bear  to  the  public,  and  what 
restrictions  should  be  put  upon  them.  Among  those 
who  appreciated  the  necessity  for  action  upon  this  ques- 
tion was  the  late  Mr.  Greely,  whose  warm  interest  in  all 
that  pertained  to  the  public  welfare  found  frequent  ex- 


/ 


4 


pression  on  this  question  both  in  the  7  rib  tine  and  else- 
where;  the  following  being  an  expression  of  bis  views 
in  1871: 

(Address  at  Minneapolis,  September,  1871.) 

u  I  speak  as  a  friend  not  only  of  railroads  in  general  bnt  of  the 
land  grunt  railroads  in  particular,  when  I  insist  on  a  reconstruc- 
tion of  the  policy  under  which  they  have  hitherto  been  authorized 
and  often  subsidized.  That  reform  can  hardly  be  too  sweeping, 
and  it  cannot  come  too  soon.  1  can  but  outline  some  of  its 
broader  features 

"  A  dozen  or  so  of  railroad  magnates,  summoned  by  private  mes- 
sage, meet  from  time  to  time  in  one  of  our  great  cities  They  con- 
sult in  secret,  dine  and  wine  satisfactorily,  adjourn  and  go  their 
several  ways.  Next  morning,  the  telegraph  wires  will  have  flashed 
across  the  land  their  decision  that  every  bushel  of  grain  going  to 
market,  every  bale  of  goods  passing  inland,  shall  henceforth  pay 
twenty  to  thirty  per  cent,  more  freight  than  has  hitherto  been 
paid.  In  effect,  this  bevy  of  railroad  kings  have  arbitrarily  re 
auced  the  value  of  every  farm,  every  quarter- section,  every  bushel 
of  grain,  in  the  Gi eat  West.  If  they  owned  the  whole  c  mn try, 
and  all  who  live  in  it.  they  could  not  1  "id  it  over  us  more  tyranni 
cally.  And  perhaps  they  will  proceed  next  day  to  make  a  scrip 
dividend,  or  additional  issue  of  stock,  representing  nothing  but 
their  own  rapacity,  so  as  to  conceal  from  dull  or  careless  eves  the 
fact  that  they  are'  exacting  from  their  customers  an  annual  profit 
of  15  or  25  per  cent,  on  their  actual  investment.   *   *  * 

"  I  ask  this  State,  and  every  State,  to  affirm  and  exercise  its 
right  of  fixing  proper  and  reasonable  rates  of  fare  and  freight  on 
•very  railroad  subject  to  its  jurisdiction ;  that  if  the  courts  should 
in  any  case  decide  that  the  power  thus  claimed  is  not  granted  to 
Legislatures  by  existing  constitutions,  then  I  ask  that  such  power 
be  exptessly  conferred  by  constitutional  amendment.  There  can 
be  no  doubt  of  the  right  of  the  people  thus  to  improve  the  funda- 
mental law  ;  in  fact,  1  can  see  no  reason  for  doubt  that  the  same 
power  which  sufficed  to  give  the  farmers'  houses  and  lands  to  a 
company  at  a  price  virtually  fixed  by  the  State,  will  suffice  to  in- 
sure the  farmers  the  right  to  use  that  railroad  at  prices  likewise 
fixed  by  the  State." 

"  Kail  road  methods  of  controlling  political  action 
about  this  time  were  exposed  in  1873,  through  the 
agency  of  a  railroad  quarrel  in  tMs  State,  resulting  in 
the  appointment  by  tbe  Legislature  of  a.comiuittee  to 
Investigate  the  management  of  tbe  Erie  Railroad.  Tbe 
following  is  from  tbe  report  of  the  committee — testimony 
oi  Mr.  Jay  Gould:  - 

"I  do  not  know  how  mnch  T  paid  toward  helping  friendly  men. 
We  had  fonr  States  to  look  after,  and  we  had  to  suit  our  politics 
to  circumstances.  In  a  Democratic  district  I. was  a  Democrat; 
in  a  Republican  district  I  was  a  Republican,  and  in  a  doubtful 
district  I  was  doubtful;  but  in  every  district  and  at  all  times  I 
have  always  been  an  Erie  man." 

TheHtateof  things  uneaithed  by  this  investigation  was  officially 
described  in  the  report  of  the  Legislative  Committee,  as  follows: 

"It  is  further  in  evidence  that  it  has  been  the  custom  of  the 
managers  of  the  Erie  Railway,  from  year  to  year,  in  the  past  to- 


5 


■pend  large  sums  to  control  elections  and  to  influence  legislation. 
In  the  year  1863  more  than  one  million  ($l,0"0,00  ')  was  disbursed 
from  the  Treasury  for  1  extra  and  le<jal  services.'  For  interesting 
items  see  Mr.  Watson's  testimony,  pages  336  and  337. 

"Mr.  G«>uld,  when  last  on  the  stand,  and  examined  in  relation  to 
various  vouchers  shown  him,  admitted  the  payment  during  the 
three  years  prior  to  1872,  of  large  sums  to  Barber,  Tweed  and  others 
and  to  influence  legislation  or  elections;  these  amounts  were 
charged  in  the  '  India-rubber  account.'  The  memory  of  this  wit- 
ness was  very  defective  as  to  details,  and  he  could  only  remember 
large  transactions;  butcou!d  distinctly  recall  that  he  had  been 
in  the  habit  of  sending  money  into  the  numerous  districts  all  ovtr 
the  State,  either  to  control  nominations  or  elections  for  Senators 
and  Members  of  Assembly.  Considered  that,  as  a  rule,  such 
investments  paid  better  than  to  wait  till  the  men  got  to  Albany, 
and  added  the  significant  remark  when  asked  a  question  that  it 
would  be  as  impossible  to  specify  the  numerous  instances  as  it 
would  to  recall  to  mind  the  numerous  freight  cars  sent  over  tho 
Erie  road  from  day  to  day."    (  See  testimony,  p.  556  ) 

The  report  of  the  Legislative  Committee  concludes  with  the 
following  remarkable  words : 

"  It  is  not  reasonable  to  suppose  that  the  Erie  Railway  has  been 
alone  in  the  corrupt  use  of  money  for  the  purposes  named;  but 
the  sudden  revolution  in  the  direction  of  this  company  has  laid 
bare  a  chat  ter  in  the  secret  history  of  railroad  management  such 
as  has  not  been  permitted  before.  It  exposes  the  reckless  and 
prodigal  nse  of  money,  wrung  from  the  people  to  purchase  the 
election  of  the  people's  representatives,  and  to  bribe  them  when 
in  office.  Accoidingto  Mr.  Gould,  his  operations  extended  into 
four  different  States.  It  was  his  custom  to  contribute  money  to 
influence  both  nominations  and  elections." 

This  state  of  things  coupled  with  the  growth  of  un- 
just discriminations,  both  as  be;  ween  communities  and 
individuals  convinced  many  citizens  that  an  effort  should 
be  made  to  reform  these  practices  ;  the  principle  that 
the  charge  for  carriage  should  be  based  upon  "cost  of 
service"  and  "  alike  to  all"  was  fast  being  lost  sight  of  ; 
and  its  modern  substitute  "what  the  traffic  will  bear," 
under  the  uncontrolh  d  interpretation  of  railroad  mana- 
gers and  freight  agents,  amounted  practically  to  '*  taking 
care  of  our  friends"  and  this  meant,  to  a  great  extent, 
the  re-distribution  of  wealth  and  commerce,  to  the  detri- 
ment of  the  many  for  the  benefit  of  the  few.  Under 
such  circumstances,  railroad  managers  and  their  favor- 
ites of  course  grew  rich — witness  Mr.  Vanderbilt  and 
Mr.  Gould  with  ail  their  immediate  associates,  among 
whom  may  be  named  as  illustrations,  Messrs.  Chauncey 
M.  Depew,  George  R.  Blanchard,  John  H.  Starin,  0.  P. 
H.  Archer,  John  B.  Dutcher,  Senator  McPherson,  T.  C. 
Eastman  and  Senator  Wagner  ;  while  as  types  ©t  favored 
shippers  we  may  mention  Messrs.  David  Dowg  &  Co., 
Jesse  Hoyt  &  Co  Messrs.  J.  D.  Rockafeller,  EL  M.  Flagler, 


6 


H.  3  Payne,  Charles  Pratt,  J.  A.  Bostwick  and  others  now 
or  heretofore  interested  in  or  connected  with  the  Standard 
Oil  Company,  to  which  the  Hepburn  Committee  alludes 
as  "  This  mysterious  organization,  whose  busin  ss  and 
transactions  are  of  such  a  character  that  its  members 
decline  giving  a  history  or  description  of  it,  lest  their 
testimony  be  used  to  convict  them  of  a  crime."  The 
testimony  in  the  Pennsylvania  investigation  showed 
that  the  Trunk  Lines  of  Railroads  paid  in  rebates  to  the 
Standard  Oil  Company  within  the  period  of  18  months, 
$10,151,218  (ten  millions  one  hundred  and  fifty  one 
thousand  two  hundred  and  eighteen  dollars)  which  was 
contributed  by  the  Roads  in  the  following  proportions  : 

Total  shipments— October  17,  1877,  to  March  31st, 

1879  bbls.,  18,556,277 

Total  rebates  during  that  time,  at  55  cents  (aver- 
age) per  barrel   $10,151,218  00 

Of  winch  there  was  paid  to  Standard  by  Baltimore 
and  Ohio  Railroad,  11  per  cent ,  as  per  contract, 
October  17,  1677   1,116,633  98 

Paid  by  New  York  Central  and  Hudson  River  Rail- 
road, 21  percent.,  as  per  contract,  October  17, 
1877    2,131,755  78 

Paid  by  Erie  Railway,  21  per  cent.,  as  per  contract, 

October  17,  1877   2,131,755  78 

Paid  bv  Pernio  lvania  Railroad,  47  per  cent.,  as  per 

contract,  Ocu.  er  17,  1877 — L7^  months   4  771  072  46 

Total  rebates,  October  17,  1877,  to  March  31,  1879..  $10,151,218  00 

Furthermore,  so  oblivious  were  the  managers  of  the 
railroads  of  their  duties  to  the  public  as  common  car- 
riers, that  they  actually  agreed  in  writing  (Article  4)  to 
shield  the  Standard  Oil  Company  "  against  loss  or  injury 
from  competition" 

A  chain  of  favored  shippers  are  also  scattered  through 
the  State  of  New  York,  some  of  whose  names  appear  in 
the  list  of  special  contracts  accompanying  the  report  of 
the  Hepburn  Committee.  Many  ol  these  men  have  been 
made  rich  by  the  advantages  given  them  by  the 
railroads  over  their  competitors,  and  it  is  one  of  the  f^a 
tures  of  this  system  that  it  tends  to  make  the  rich 
richer,  and  the  poor  poorer.  It  was  tbis  state  of 
things  which  caused  the  establishment  of  the  Cheap 
Transportation  Association,  now  the  "  Board  of  Trade  and 
Transportation."  Legislation  calculated  to  remedy  these 
evils  was  proposed,  among  the  measures  being"  one  10 
create  a  Board  of  Railroad  Commissioners,  with  super- 
visory powers.    The  railroad  managers  denied  the  ex- 


7 


istence  of  the  alleged  abuses  and  the  necessity  for  com- 
missioners. This  and  other  commercial  bodies  then 
(in  1877)  asked  for  a  joint  legislative  committee  of  in- 
vestigation ;  this  the  railroads  opposed,  and,  through 
their  control  of  the  Senate,  defeated.  In  1878  the 
commercial  and  producing  organizations  succeeded  in 
getting  the  Assembly  to  order  an  investigation  which 
occupied  the  entire  summer  of  1879.  Ihis  committee 
which  was  composed  of  nine  members,  (Hon.  A.  B. 
Hepburn,  Chairman,)  did  their  duty  ably,  impartially 
and  thoroughly,  and  fully  established  all  and  more  than 
had  been  alleged.  We  quote  the  following  from  the 
committee's  report  (patre  48)  : 

"The  charge  that  the  railroads  of  this  State  discriminate 
against  the  citizens  of  this  State,  and  in  favor  of  Western  and 
foreign  producers,  is  fully  proven  by  the  evidence  taken  The 
charge  that  they  di*ci iminate  against  certain  localities  in  the 
State,  as  compared  with  others,  is  fully  proven.  The  charge  that 
they  discriminate  in  favor  of  certain  individuals,  as  compared 
with  others  in  the  same  locality,  is  fully  proven." 

Regarding  the  growth  of  our  railway  system,  they 
say  : 

"  The  mistake  was  in  not  providing  proper  safeguards  to  pro- 
tect the  public  interest,  and  hold  the  railroads  to  a  strict  account- 
ability for  their  transactions,  thus  through  the  laxi'y  of  our  law t 
and  the  want  of  governmental  control,  (measurably  excusable, 
considering  the  unforeseen  possibilities  of  railroad  development 
at  the  time  of  the  enactment  of  those  laws,  but  no  longer  pardon- 
able in  the  light  of  the  evidence  herewith  submitted),  have  crept 
in  those  abuses  hereafter  mentioned,  so  glaring  in  their  propor- 
tions as  to  savor  of  fiction  rather  than  actual  history.  (See 
report,  page  7.) 

The  Committee  accompanied  their  report  with  a  series 
of  seven  bills  designed  to  remedy  the  various  defects  in 
the  present  railroad  law  of  this  State;  of  these  four 
have  become  laws  and  three  failed,  including  among 
the  latter  the  two  most  important  ones,  viz.:  the  one  to 
create  a  Board  of  Railroad  Commissioners,  and  one  to 
prevent  unjust  discriminations,  commonly  known  as  the 
**  Anti-discrimination  Bill."  The  railroads,  doubtless 
anticipating  an  attempt  to  bring  them  to  justice,  in  fix- 
ing rates  for  transportation,  as  well  as  to  make  them 
pay  more  taxes,  which  they  had  largely  avoided  in  the 
past,  made  great  efforts  at  the  last  election  to  secure  a 
►Senate  which  they  could  control,  and  succeeded  so  that 
no  measure  can  pass  the  present  Senate  of  this  Staid 
except  such  as  railroad  managers  approve. 


8 


As  a  compromise,  however,  in  deference  to  public 
opinion,  they  allowed  the  four  minor  bills  above  men- 
tioned to  become  laws,  and  also  passed  a  tax  law,  after 
reducing  the  rate  about  one  half  from  that  passed  by 
the  Assembly,  which  had  substantially  adopted  the  Penn- 
sylvania law,  taxing  corporations. 

It  was  freely  stated  at  Albany  during  the  past  winter 
that  the  railroads  contributed  largely  towards  the  election 
expenses  of  a  majority  of  the  members  of  the  present 
Senate,  and,  of  course,  naturally  received  their  support; 
but  railroads  do  not  rely  entirely  upon  thus  influencing 
votes;  they  take  care  to  elect  some  of  their  own  men. 
Senator  Wagner,  who  is  Chairman  of  the  Committee  on 
Railroads,  is  President  of  the  Drawing  room  Car  Com- 
pany of  the  N.  Y.  Central  Road  ;  Senator  Hogan  occu- 
pies a  salaried  position  as  Emigrant  Agent  of  the  Erie 
Railroad ;  while  Senator  Brarnan  is  said  to  be  connected 
with  the  manufacture  of  locomotives  at  Troy. 

2nd.  Another  class  who  are  even  more  useful 
to  the  railroads  are  prominent  members  of  the  legal  pro- 
fession, many  of  whom  are  regularly  retained  along  the 
entire  length  of  the  road  ;  and  some  of  those  thus  em- 
ployed are  regularly  elected  to  the  legislature  by  the 
railroads.  Senators  Robertson,  Jacobs  and  Wood  in  are 
types  of  this  class. 

This  class  work  more  secretly,  profess  to  be  friendly, 
assure  you  that  they  will  "  do  all  they  can  for  the 
measure,"  where  the  public  interest  is  involved,  but 
secretly  endeavor  to  stifle  it  in  committee  or  pre 
vent  it  from  ever  coming  to  a  vote.  In  case  they  are 
not  successful  in  this,  they  either  vote  against  it  or 
are  "absent"  when  the  vote  is  taken.  In  some  in- 
stances, when  they  are  sure  of  enough  adverse  votes  to 
defeat  a  measure  which  they  know  their  constituents 
favor,  they  will  even  vote  aye,"  although  had  they 
been  told  by  the  Railroad  Managers  that  their  vote  was 
wanted,  they  would  have  been  found  recorded  on  the 
other  side. 

3rd.  Another  and  more  numerous  class  are  merchants 
or  manufacturers  interested  in  various  enterprises  which 
the  railroads  can  greatly  assist  by  giving  favorable 
rates  of  freight,  and  this  power  is  freely  used  ;  of  this 
type  Senator  McCarthy  is  an  example. 

4th.  Another  class  cannot  be  thus  controlled,  but  hav- 
ing friendly  personal  relations  with  the  railroad  repre- 


9 


sentatives  (who  are  always  most  agreeable  men),  they 
are  influenced  by  them  ;  and  unhss  the  it-sue  is  sharply 
defined  by  their  immediate  constituents,  they  vote  with 
the  railroad  and  against  the  public  interest.  This  class 
is  closely  cultivated  by  the  railroad  representatives  ; 
free  passes  and  other  "  courtesies  "  are  showered  upon 
them,  and  in  many  instances  their  votes  are  controlled 
as  absolutely  as  those  of  class  3.  For  several  years  it 
has  been  the  annual  custom  of  the  N.  Y.  Central  Road, 
through  Senator  Wagner,  to  give  "an  excursion"  to 
members  of  the  Legislature,  in  which  lavish  expendi- 
ture has  been  the  prominent  feature;  for  the  last  two 
years  the  destination  has  been  Canada  or  Buffalo,  but 
this  year  a  chosen  few  were  taken  to  Chicago  to  work 
for  the  Railroad  Candidate  for  the  Presidency. 

5th.  Representatives  in  all  classes,  many  of  whom 
are  good  men,  will  be  shrewdly  put  under  obligation  by 
the  railroad  representatives,  so  they  are  obliged  to  sup- 
port measures  they  do  not  fully  approve  of,  or  through 
fearsome  favorite  measure  of  their  own  will  be  defeated 
if  they  do  not. 

Others  a<:ain  are  good  men,  who  would  like  to  vote 
for  the  best  interests  of  the  public,  but  who  have  never 
had  occasion  to  study  the  question  of  transportation, 
are  not  informed  as  to  its  merits,  and  are  influenced  by 
the  sophistical  arguments  presented  by  Railroad  Attor- 
neys and  Lobbyists  who  constantly  frequent  our  legis- 
lative halls,  and  take  every  opportunity  to  present  their 
side  of  the  case,  and  decry  and  misrepresent  that  of  the 
public. 

The  same  principles  apply  and  the  same  tactics  are  em- 
ployed in  the  Assembly  as  in  the  Senate,  but  the  latter  is 
much  the  smaller  body,  the  members  are  elected  for  two 
years  instead  of  one  as  in  the  Assembly,  and  it  is  con- 
sequently more  easily  and  cheaply  controlled. 

In  opposing  the  Anti-discrimination  bill  the  railroads 
summoned  to  their  aid  shippers  who  had  pre.'erential 
rates,  and  ran  special  trains  through  the  State,  convey- 
ing these  persons  free,  and  paying  their  expenses,  a  thing 
which  so  far  as  your  committee  are  aware,  never  before 
occurred  in  the  history  of  the  State.  This  occasioned 
wide  remark  by  the  press,  and  was  commented  upon 
at  the  time  by  the  N.  T.  Evening  Post  as  follows  : 

"  The  power  thus  exerted  upon  the  pending  bill  to  prohibit  un- 
fair discrimination  in  freight  charges  may  at  any  time  be  exerted 


10 


upon  legislation  touching  railroad  interests.    The  railroads  reach 

Into  every  important  centre  of*  population,  and  thousands  of  men 
may  be  precipitated  upon  the  Capitol  at  a  few  hours'  notice.  One 
of  the  objections  urged  against  establishing  the  State  capital  io 
New  York  City,  when  the  subject  was  under  discussion,  was  the 
danger  of  intimidation  by  a  rabble  populace.  A  similar  means  of 
influencing  legislation  is,  it  appeals  by  to-day's  experience,  in  the 
hands  iifl  he  r  ailroads.  Whet  her  the  pending  bill  be  wise  or  not.  the 
means  takt-n  to  crush  it  out,  are  reprehensible.  By  the  admission  of 
one  of  the  leading  opponents  of  the  measure,  the  ct  owd  around  the 
Railroad  Committee  to-day  was  made  up  of  men  who  are  the  re 
cipients  of  favors  from  the  railroads.  They  could  not  refuse  nor 
neglect  to  obey  when  summoned,  b 'Cause  the  railroads,  under 
existing  laws,  ate  their  masters.  If  they  hesitate  to  come  to  the 
relief  oi  the  railroads  when  they  are  wanted,  they  run  the  risk  of 
losing  the  enjoyment  of  those  favors  by  tea  on  of  which  they  tare 
better  than  their  neighbors.  The  whole  proceeding  was,  it  is  not 
too  much  to  nay,  a  species  of  iutimidat  ion,  which,  if  allowed  to 
come  into  practice  at  Albany,  will  be  a  source  of  great  evil." 

The  law  in  question  was  a  very  moderate  one  ;  it  did 
not  prohibit  special  rates,  but  prohibited  secret  rates, 
and  where  special  rates  were  given,  provided  that  they 
should  be  alike  to  all  under  the  same  circumstances  ;  also 
that  any  person  shipping  a  car-load  should  be  entitled  to 
the  lowest  rate.  Many  of  the  gentlemen  who  came  to 
Albany  at  the  summons  of  the  Railroads,  acknowledged 
that  they  had  not  read  the  bill,  but  stated  that  they  had 
been  told  that  it  would  prevent  their  obtaining  reason- 
able rates  of  freight  necessary  to  their  business  and  to 
this  they  were  opposed  ;  they,  were  however,  in  favor  of 
the  supervision  and  regulation  of  Railroads.  Others 
however,  were  violently  opposed  to  any  law  or  regula- 
tion ;  these  as  a  rule  were  those  who  had  secret  and 
preferential  rates.  They  loudly  echoed  the  idea  set 
afloat  by  the  Railroad  lobbyists,  that  the  whole  investi- 
gation and  subsequent  legislation,  was  inspired  and  con- 
trolled by  a  few  New  York  merchants  who  wished  to 
monopolize  the  trade  of  the  interior  of  the  State.  The 
only  answer  necessary  to  this  absurd  statement  is,  that  if 
the  gentlemen  who  made  it  did  so  honestly  believing  it, 
they  either  showed  their  ignorance  of  the  provisions  of 
the  bill  in  question  or  demonstrated  their  unwillingness 
to  permit  the  general  public  to  share  in  the  advantages 
they  enjoyed.  In  the  latter  case  it  is  perhaps  too  much  to 
expect  that  such  men  can  rise  to  the  plane  of  appreci- 
ating public  spirited  and  patriotic  motives,  and  effort,  on 
the  part  of  other  citizens. 

The  following  vote  in  the  Assembly,  on  Mr.  Duguid's 
motion  to  order  the  Anti  discrimination  Bill  to  a  third 


11 


reading-,  furnishes  a  grood  idea  of  how  the  members  of 
that  body  stood  upon  this  question. 

Ayes. — Messrs.  Baker,  C.  S  .  Beach.  Beates,  Benedict,  T-  E., 
Bradley,  Bieunan,  Bridges.  Brodsky,  Builock,  Carpenter  I.  S., 
Cas*\  Chambei lain,  Cbickering,  Clancy,  Clark,  Cohan,  Congdou, 
Cookinham,  Costello,  Crapser,  Curtis,  Cushiug.  Davis  Dt-ane, 
Dougherty,  Duell.  Duguid,  Ellis,  Evan<»,  Fei  ris,  Fish,  Fitzgerald, 
Gibbs,  Gray,  Grosse,  Gwinup,  Hagan.  Howlaiid,  Hurd,  Kennedy, 
Lindsay,  Low,  McAvoy,  McCarthy,  McDonald,  McTeman.  M  oners, 
O'Connor,  Peck,  Phillips,  Potts,  Rhodes.  Kobeits,  Root,  Seely, 
Shauley,  Sherman,  Slmit,  Sisson,  Skinner,  Steele,  Strait,  Terry, 
Thilematm,  Titus,  Treanor,  Tully,  Tut  hill,  H.  H.,  Tuttle,  R.  M.., 
Walsh,  Waterbury,  Wells,  J.  L.,  Wren,  73. 

Noes. — Messrs.  Alvord.  Andrews,  Baker,  B.  F.,  Carpenter,  E.A., 
Clowes,  Comstock ,  Cnlliuan,  Douglass,  Kiske,  Gillette,  GorsMne, 
Griggs  Havens,  Hayes,  Hoffman.  Husted,  Lele  er,  Liddie, 
McCabe,  Mead,  Mitchell,  Morgan,  Now lan,  Pitcher,  Potter,  Rus- 
sell, Sanders,  Sipp,  Tallinadge,  Toiier,  Travis,  Wells,  D.  A., 
Youngs,  33. 

Ahsknt  or  Not  Voting. — Messrs.  Ash,  Benedict,  E  D. ,  Bennett, 
Catliu,  Chase.  Childs.  Crafts,  Iupersoll,  Miller,  Newman,  O'Bi  ian, 
Parker.  Sheridan,  Slingerlaud,  Terpeuy,  Toriuey,  Van  Valken 
burgh,  Varnuin,  Warner,  Weston,  Wiley.  41. 

Of  the  above,  Messrs.  Alvord,  Husted,  and  Isaac  J.  Hayes,  are 
tUe  recognized  champions  ol  corporate  interests  in  the  Assembly, 
and  Messrs.  Tozier,  Catliu,  and  Tallma<ige  made  themselves 
conspicuous  during  the  last  session  by  their  subseiviency  $o  tk^ 
railroads. 

The  following  vote  in  the  Senate,  upon  the  motion  ot 
Senator  Pitts  to  substitute  the  third  section  of  the 
Assembly  Anti-discrimination  Bill  for  that  reported  by 
Senator  Wagner's  Committee,  will  indicate  substantially 
how  Senators  stood  on  this  que-tion. 

Ayes. — Messrs.  Davenport,  Lord,  Lynde,  Pitts,  Schroeder,  S;ra- 
han,  Williams,  Winsiow,  8. 

Noes — Messrs.  Astor,  Birdsall,  Braman.  Eidman,  Forster,  Fow- 
ler, Haibert.,  Hogan,  Jacobs,  Loom  is,  Madden,  McCarthy,  Mills, 
Murtha,  Robtrts«n,  Rockwell,  Seebacher,  Stevens,  Wagner,  Wen- 
dover,  VVoodiu,  21. 

Absent  or  Not  Voting. — Messrs.  Baker,  Jr.,  Bixby,  Sessions, 
 3. 

The  misrepresentations  made  by  the  Railroads  that 
the  proposed  legislation  was  in  the  interest  of  New  York 
City,  and  against  the  interior  ot  the  State,  which  was 
loudly  echoed  by  the  special  rate  men,  doubiless  influ- 
enced in  their  favor  the  votes  of  a  lew  o;ood  men,  who 
on  general  principles,  are  in  favor  of  the  supervision 
and  control  of  railroads  as  public  highways. 

The  fear  ot  putting  additional  patronage  at  the  dis- 
posal of  a  Republican  executive  on  the  eve  of  a  presi- 


12 


dential  election,  doubtless,  lost  the  commissioners'  bill 
some  votes,  and  an  amusing  feature  of  the  railroads, 
opposition  to  the  commissioners'  bill  was  the  solicitude 
of  Mr.  Depew,  who  attends  to  the  legislative  disburse- 
ments of  the  New  York  Central  Road,  lest  the  public 
service  should  become  corrupted  through  the  appoint- 
mnnt  by  Governor  Cornell  of  three  corrupt  politicians 
as  Railroad  Commissioners — :a  thing  he  was  perfectly 
sure  would  occur  in  case  the  commissioner's  bill  became 
a  law.  It  is  probable,  in  case  a  Railroad  Commission  is 
created  that  Governor  Cornell  would  constitute  it  similar 
to  those  of  other  States — fairly  representative  of  the 
producing,  commercial  and  railroad  interests.  In  this 
connection  it.  may  be  well  to  recall  the  words  of  the 
U.  S.  Senate  Committee  on  Transportation  Routes,  re- 
garding the  necessity  of  Governmental  supervision  and 
regulation  of  railroads  : 

"  With  the  rapid  and  inevitable  progress  of  combination  and 
consolidation,  these  oolossal  organizations  are  daily  becoming 
stronger  and  more  imperious.  The  day  is  not  distant  if  it  has 
not  already  arrived,  when  it  will  be  the  duty  of  the  statesman  to 
inquire  whether  there  is  less  danger  in  leaving  the  property  and 
industrial  inteiests  of  the  people  thus  wholly  at  the  mercy  of  a 
tew  men,  who  recognize  no  responsibility  but  to  their  stock- 
holders, and  no  piinciple  of  action  but  personal  and  corporate  ag- 
grandizement, tban  in  adding  somewhat  to  the  power  and  patron- 
age (fa  government  directly  responsible  to  the  people  and  eutire- 
ly  under  their  control."— Report  of  the  V.  S.  Senate  Committee  on 
Transportation  Routes,  Page  158. 

It  is  evident  that  the  public  welfare  demands  that 
Railroads,  both  State  and  Inter-State,  should  be  super- 
vised and  regulated  in  the  interest  of  the  public,  and 
that  in  this  State  the  reforms  which  have  been  so  ma- 
terially progressed  during  the  past  year,  must  be  fol- 
lowed up  until  the  rights  of  all  classes  of  citizens  are 
recognized  on  these  modern  highways. 

It  is  reported  however  that  the  Rail  oad  Managers 
will  oppose  to  the  bitter  end  any  and  all  attempts  to  con- 
trol them  :  that  free  passes,  advertisements,  and  other 
favors  are  being  extended  to  the  "Press"  more  freely 
than  ever  before  ;  that  "  a  vigorous  political  policy  will 
be  pursued that  expressions  upon  this  subject  in 
political  platforms  will  be  suppressed  ;  (note:  this  was 
carefully  done  in  the  Republican  national  platform  at 
Chicago,)  that  legislators  who  made  themselves  conspicu- 
ous in  behalf  of  the  public,  if  seeking  re-election  will  be 
beaten,  wherever  money  can  accomplish  it,  and  in  short, 


13 


lhat  the  policy  of  repressing  public  opinion  will  be 
pursued,  instead  of  making  concessions  to  it. 

Money  is  a  potent  power  in  politics  ;  even  where  not 
directly  used  to  purchase  votes,  it  can  subsidize  the 
Press,  circulate  "information,"  get  up  meetings,  pay 
speakers,  and  manufacture  enthusiasm  in  various  ways. 

A  paragraph  has  appeared  in  the  "Press"  to  the 
effect,  that  if  a  prominent  citizen  of  Cleveland  who  has 
been  identified  with  the  Standard  Oil  Company  should 
receive  the  Democratic  nomination  for  President,  four 
of  his  friends  would  contribute  half  a  million  of  dollars 
toward  his  election.  _> 

A  half  a  million  of  dollars  would  be  but  a  small  sub- 
scription for  the  men  to  make  who  receive  in  rebates 
upwards  of  ten  millions  of  dollars  in  18  months.  Such 
men  can  afford  to  be  liberal,  and  railroad  managers  who, 
as  expressed  by  Mr.  Greeley,  possess  the  power  to  tax 
unquestioned,  every  bushel  of  grain  and  every  bale  of 
goods,  can  afford  to  contribute  liberally  to  elect  every 
legislator  in  the  land,  if  thereby  they  can  insure  the 
continuance  of  this  power. 

As  stated  by  the  U.  S.  Senate  Committee  on  Transporta- 
tion Routes,  pwith  the  rapid  and  inevitable  progress  of 
"  combination  and  consolidation  these  colossal  organiza- 
"  tions  are  daily  becoming  stronger  and  more  imperious." 
The  past  year  has  witnessed  vast  consolidations  and 
combinations,  by  which  competition  is  practically  abro- 
gated ;  the  latest  instance  being  the  absorption  of  the 
Pacific  Mail  Steamship  Company  by  the  Pacific  roads, 
by  which  the  last  vestige  of  competition  enjoyed  by  the 
people  of  the  Pacific  coast  is  swept  away.  Unless 
charges  for  transportation  are  based  upon  cost  of  service 
and  regulated  by  law,  the  railroads  are  virtually  owners 
of  the  country  ;  indeed  it  is  more  advantageous  to  the 
railroad  managers  than  if  they  had  a  proprietory  inter- 
est in  all  property  ;  for  wi^h  charges  for  transportation 
based  upon  the  principle  of  "  what  the  traffic  will  bear," 
and  the  railroad  managers  sole  judges  of  this  question, 
they  can  tax  all  production  and  commerce  to  the  extent 
of  the  entire  profit,  without  the  trouble  or  responsibility 
of  ownership.  This  is  what  was  actually  done  in  Cali- 
fornia, and  was  the  principal  cause  of  the  communistic 
manifestations  there  ;  indeed  this  is  the  chief  cause  of 
the  growth  of  communistic  views  and  communistic, 
utterances,  and  it  ie  of  the  greatest  public  importance 


14 


especially  to  the  great  mass  of  property  owners,  that 
this  tendency  should  be  checked  by  the  prohibition 
of  unjust  and  unequal  taxation  of  the  many  for  the 
benefit  of  the  few.  It  is  opposed  to  the  spirit  of  our 
institutions,  to  the  whole  tenor  of  the  Constitution  of 
the  United  States,  and  it  is  absolutely  necessary  for  the 
public  welfare  that  our  statesmen  should  comprehend 
the  workings  of  the  vast  forces  which  have  been  brought 
into  being  since  the  adoption  of  that  instrument,  and 
grapple  with  the  problems  which  are  their  result. 

Honestly  and  equitably  managed  Railroads  are  the 
most  beneficient  discovery  of  the  century,  but  perverted 
by  irresponsible  and  uncontrolled  corporate  manage- 
ment, in  which  stock- waterng and  kindred  swindles  are 
tolerated,  and  favoritism  in  charges  is  permitted,  they 
become  simply  great  engines  to  accomplish  unequal 
taxation,  and  to  arbitrarily  re-distribute  the  wealth  of 
the  country.  When  this  state  of  things  is  sought  to  be 
perpetuated  by  acquiring  political  power  and  shaping 
legislation  through  corrupt  me  of  money,  the  situation 
grows  more  serious. 

It  is  not  too  much  to  say,  that  corporati  ns  are  chiefly 
resp  >nsible  for  the  increasing  use  of  money  in  our  elec- 
tions, and  fo  often  has  lavish  expenditure  of  money 
"  wrung  from  the  people  to  purchase  the  election  of  the 
people's  representatives,"  been  successful  in  defeating 
honest  men  who  were  not  sufficiently  subservient  to 
corporate  interests,  that  in  the  selection  of  Candidates 
now  the  questions  mou  likely  to  be  asked,  are  not  "  is 
he  honest  and  capable"?  but  "how  big  a  barrel  has 
he  "  ?  or  "  who  stands  behind  him  "  ? 

Political  managers  are  largely  responsible  for  this,  by 
accepting  subscriptions  from  railroad  men  to  campaign 
funds,  and  it  must  be  expected,  that  corporate  interests 
will  have  the  precedence  in  legislation  so  long  as  this 
practice  is  continued. 

It  remains  to  be  seen  however,  whether  or  not  this 
state  of  thins:  will  much  longer  be  tolerated  ;  the  people 
may  in  the  future,  have  something  more  to  say  about 
who  saall  and  who  shall  not  be  nominated  and 
elected,  and  how  charges  shall  be  levied  which  affect 
the  price  of  every  piece  of  real  estate  and  enhance  the 
pride  of  every  ton  of  coal  or  barrel  of  flour.  The 
investigation  by  the  Hepburn  Committee  swept  away 
much  of  the  mist  of  misrepresentation  and  mystery 


15 


which  has  heretofore  surrounded  this  question.  It  can 
no  longer  be  said  that  abuses  do  nor  exist  except  in  the 
brains  of  visionary  Communistic  dreamers,  although 
some  of  tliose  who  profit  by  the  maladministration  of 
these  public  trusts,  have  not  scrupled  to  abuse  and  en- 
deavor to  discredit  the  findings  of  the  Committee.  In 
the  face  of  facts  already  shown,  ai  d  others  which  can 
be  shown,  it  would  seem  that  a  recognition  by  the  Rail- 
road managers  of  public  rights,  instead  of  further  denial 
of  them,  would  be  wisest. 

These  rights  have  everywhere  been  recognized  by 
the  Court**,  the  latest  being  a  decision,  in  May,  1S80,  by 
the  U.  S.  Circuit  Court  at  Louisville,  Ky.,  in  deciding 
which  Judge  Baxter  says  : 

"TJailrnads  are  quasi  pnhlic  institutions.  They  are  authorized 
to  facili  tale,  and  not  to  control  or  fore?  fr»m ,  legitimate  and  natural 
channels,  or  hinder  or  obstruct  the  business  of  the  country.  Rail- 
road  companies  as  common  carriers,  aie  hound  t<>  the  extent  of 
their  corporate  means  to  supply  all  the  accommodations  and 
facilities  demanded  by  the  regular  and  ordinary  business  of  the 
country  through  which  they  pass.  Neither  the  railroad  compa- 
nies nor  the  points  can  discriminate  in  favor  of  one  or  more  par- 
ties as  against  others.  All  are  entitled  to  the  same  measure 
of  accommodation  who  may  offer  to  do  the  like  business." 

The  progress  made  in  thus  defining  the  rights  of  the 
public  may  to  many  seem  slow  ;  but  since  the  days  of 
the  first  agitation  by  the  Grangers  of  the  West,  a  long 
step  has  been  taken.  At  that  time  "the  Dartmouth 
College  decsion"  was  thrown  in  the  teeth  of  the  pub 
lie  as  an  argument  to  prove  that  the  people  of  one  gen- 
eration have  the  power  and  right  to  make  a  contract 
which  could  not,  under  any  circumstances,  be  modified 
by  those  of  the  next  generation,  and  that  railroad  char- 
ters were  such  contracts.  The  Supreme  Court  of  the 
United  States  has  since  rendered  decisions  in  the  Gran- 
ger cases  and  others,  which  affirm  the  absolute  right  of 
the  people  to  control  these  modern  highways.  Boards 
of  Railway  Commissioners  have  been  established  in 
fourteen  States  to  supervise  the  management  of  rail- 
roads, and  numerous  laws  have  been  passed  defining  and 
protecting  the  public  interest.  Much,  however,  remains 
to  be  done,  as  in  some  States,  notably  our  own,  the  rail- 
roads have  exercised  a  controling  power  in  politics  and 
legislation.  It  is  not  to  be  expected  that  abuses  so 
deeply  rooted,  and  sustained  by  such  enormous  power, 
can  be  removed  in  a  day.  As  in  the  agitation  against 
slavery  it  may  take  a  lifetime      It  is  only  anothei 


1G 


phase  of  the  fight  for  liberty  and  public  rights,  and  in 
this,  a*  in  that  against  slavery,  the  sympathies  of  an 
influential  class  are  against  those  who  are  foremost  in 
advocating  the  rights  of  the  many  as  against  privileges 
for  the  few.  In  the  end  the  result  caunot  be  doubtful, 
And,  invoking  the  aid  and  influence  of  all  who  believe 
in  the  above  principle,  we  respectfully  submit  the  fol- 
lowing resolutions : 

F.  B.  THURBER, 
MOSES  G.  HAN  A  ITER, 
FRANCIS  BAKER,         [  Committee. 
H.  K  MILLER, 
CHARLES  WATROUS, 

Resolved,  In  the  opinion  of  this  Board,  the  management  of  rail- 
roads of  the  country,  with  dne  regard  to  the  public  interest,  is  a 
question  of  paramount  importance  to  every  producer,  manufac- 
tu:er  ano  merchant  within  its  boundaries;  that  tbe  question  of 
ordinary  taxation  for  purposes  of  Government  is  insignificant 
compared  with  the  taxation  of  railroads  for  transportation,  the 
charges  of  the  latter  for  this  service  in  this  State  alone  being 
nearly  twelve  times  the  entire  revenue  of  the  State  derived  from 
taxation. 

Resetted,  That  in  the  past  the  producing  and  commercial 
classes  have  not  given  enough  attention  to  this  all-important  sub- 
ject, and  that  it  is  the  duty  of  all  classes  of  citizens  to  steadily 
work,  both  politically  and  otherwise,  to  eliminate  t^e  defects  and 
abuses  in  our  transportation  system,  which  bear  so  heavily  upon 
■he  material  interests  of  our  State  and  Country. 

Resolved,  That  the  use  of  money  by  railroad  corporations,  as 
expressed  by  a  Legislative  Committee,  "  to  purchase  the  election 
of  the  people  s  representatives,"  is  a  practice  which  practically 
destroys  the  purity  of  our  elections,  tends  to  undermine  our  sys- 
tem of  Government,  and  the  public  interest  demands  that  means 
should  be  taken  to  prevent  this  practice  in  future.  If  it  can  not 
be  stopped,  it  can  be  made  unlawful  and  disreputable. 

Resolved.  That  copies  of  these  resolutions  be  transmitted  to  all 
members  of  this  Board,  and  to  such  other  persons  aud  organiza- 
tions as  the  Executive  Committee  may  order. 

Tbe  report  and  resolutions  were  unanimously  adopted. 


I  AVER' 


J7a  franchise  was  granted  to  an  association  of  indi- 
viduals to  build  an  improved  turnpike  road  and  to  reim- 
burse themselves  by  levying  lolls  that  would  yield  ten  per 
cent,  upon  the  cost  thereof,  it  would  doubtless  be  expected 
that  all  citizens  would  be  permitted  to  use  the  road  upon 
equal  terms;  and  if,  through  the  development  of  the  coun- 
try, the  traffic  so  increased  that  a  lower  rate  of  tolls  would 
yield  Un  per  cent.,  thit  the  public  would  have  the  benfjit 
of  it. 

What  icould  be  thought  of  a  t  urnpike  corporation  which 
reported  a  fictitious  cost,  adjusted  its  tolls  upon  that  basis, 
and,  when  traffic  increased,  again  watered  its  stock  to 
conceal  its  earnings  ?  What  if  it  permitted  favoritism, 
making  the  rich  richer  (sometimes  its  own  stockholders), 
by  charging  them  less  tolls  f  Wliat  if,  finding  that  all 
production  and  commerce  in  a  certain  section  must 
pay  it  toll,  it  disregarded  the  principles  under  which 
charter  was  granted,  viz..  that  charges  should  be  based 
"upon  cost  of  service  and  alike  to  all,  and  adopted  the 
principle  of  "all  the  traffic  will  bear,"  itsef  being 
the  sole  judge  of  this  question  ?  What  if  this  system 
should  make  those  who  controlled  this  corporation  very 
rich  and  powerful,  and  in  order  to  perpetuate  this 
power,  they  should  seek  control  in  politics,  select  and 
elect  {or  corrupt)  enough  legislators  to  control  legislation 
and  thus  perpetuate  a  system  width  unnecessarily  en- 
hanced the  cost  to  the  consumer  of  every  barrel  of  flour 
and  every  ton  of  coal  as  well  as  other  item?,  or  reduced 
in  equal  ratio  the  price  received  by  the  producer  ?  This 
is  what  railroad  corporations  have  done  and  are  doing. 
See  within  short  report. 


SEYMOUR  DURST 


New  York  Board  of  Trade  &  Transportation 


The  Objects  of  the  New  York  Board  of  Trade  and  Tram- 
portation  are  to  obtain,  preserve  and  circulate  valuable 
and  useful  information  relating  to  the  commerce  of 
the  United  States,  to  encourage  wise  and  needful 
legislation,  bearing  upon  mercantile  interests;  to 
study  the  workings  of  our  system  of  transpor- 
tation, upon  which  our  commercial  prosperity 
so  largely  depends,  and  endeavor  to  remedy 
by  all  proper  means  the  defects  and 
abuses  existing  therein. 


EOARD  ROOMS,  87  &  89  Pearl  St. 


EXTRACT  FROM  OBJECTS. 


OFFICERS. 


AMBROSE  SNOW,  President. 


D.  R.  JAMES.  Secretary 

E.  R.  DURKEE,  Treasurer. 


DIRECTORS. 


Ambrose  Snow, 
H.  B.  Claflin, 
H.  W.  Johnson, 
John  F.  Henry, 
John  H.  Kemp, 
A.  B.  Miller, 
E.  R.  Durkee, 
II  K.  Miller, 
F  B.  Thurber, 
Chas.  Watrous, 
Havilah  M.  Smith, 
Moses  G.  Hanauer, 
Jno  P.  Townsend, 
Benj.  P.  Baker, 
Wm.  A.  Cole, 
D.  H.  Houghtaling. 
Harvey  Farnngton. 
L>.  J.  N.  Stark, 


J ohn  Dwigbt, 
Wni,  I.  Preston, 
Wm.  H.  Wiley, 
Benj.  Lichtenstein, 
Jas.  S.  Barron, 
Henry  E.  Hawley, 
E  F.  Browning, 
Robt  F.  Austin, 
X.  C.  Miller. 
Darwin  R.  James, 
Simon  Sterne, 
Jas.  F.  Joyce, 
L.  F.  Holman, 
Henry  Elliott, 
Francis  Baker, 
P.  Farrelly, 
John  Claflin, 
Samuel  Ray  nor, 


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